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The Danish Gambling Authority (DGA) has issued three injunctions and two indictments to SkillOnNet for failings in its anti-money laundering (AML) procedures.

After an inspection of the online casino operator and supplier’s internal checks and procedures, the DGA found several failings which led it to issue warnings and demand changes to SkillOnNet’s AML processes.

Three injunctions issued

The first of the three injunctions was issued because SkillOnNet’s business risk assessment was deemed insufficient.

Denmark’s Money Laundering Act requires companies such as online gambling firms to carry out separate risk assessments on various areas, including their specific business models, products and payment solutions used.

Companies must use the assessments to identify the risk of being misused for money laundering or terrorist financing.

SkillOnNet was deemed not to have carried out sufficient separate risk assessments of its individual products and payment solutions, and was therefore not compliant with the relevant regulations.

The second of the injunctions was issued for “deficient business procedures”, as SkillOnNet did not have written procedures in place to adequately describe how, when and by who internal money laundering checks are carried out.

The third injunction was given because the company had not sufficiently documented the previous AML checks that had been carried out.

Two indictments follow

SkillOnNet was also issued two separate indictments by the DGA, the first of which was given for insufficient business procedures relating to KYC requirements.

The company’s KYC processes were found to be lacking, as “there was a discrepancy between the business procedure and practice.”

For example, its processes prior to October 2023 did not adequately ensure that KYC checks were carried out at appropriate times, while the business also failed to sufficiently screen for politically exposed persons among its customers.

The second indictment was issued as the company’s internal whistleblower scheme, intended to empower employees to report potential violations of AML regulations, was deemed insufficient by the regulator.

Companies covered by Denmark’s Money Laundering Act must provide an anonymous, independent channel through which employees can alert the authorities to potential violations.

SkillOnNet’s scheme did not properly protect employee anonymity, as violations could only be reported via email, and therefore failed to meet the required standards of an AML whistleblower scheme.

Action required

The regulator’s initial three injunctions require SkillOnNet to take action to improve its processes.

Within two months, the company must submit a revised risk assessment and business process for checking its internal controls to the regulator.

Within six months, it must submit additional documentation showing that checks and internal controls have been carried out as intended.

As for the additional indictments, SkillOnNet is not required to take action “as the violations no longer exist.” 

The firm has already revised its business procedures and whistleblower scheme after being alerted to the regulator’s findings.

The regulator also issued a warning to other companies in the online gambling sector, suggesting they should scrutinise their internal policies and procedures to ensure they are protected against misuse for money laundering or terrorist financing.

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